UK construction PMI rebounds to seven-month high

03-Jul-2018

Blane Perrotton, managing director of the
national property consultancy and surveyors Naismiths, said:

“The construction industry somehow skipped
springtime this year – and has been catapulted from a polar winter into a
heatwave.

“True, the figures are flattered by comparison
to the weak data recorded at the start of 2018. But such solid improvements in
both output and new orders reveal some genuine momentum.

“In part this is the release of pent-up demand,
which has been building for months. There is only so long that investment
decisions can be delayed, and on the front line we’re seeing increasing numbers
of developers opting to pull the trigger before the opportunity passes them by.

“While optimism is strongest outside London –
with the North West, West Midlands and Bristol markets all buoyant – even the
capital is starting to see a creeping improvement in sentiment.

“The downside of this is the spectre of rapid
cost inflation, as construction firms rush to recruit from a shrinking pool of
available workers and the weak Pound keeps imported material costs high.

“Housebuilders remain the poster children of
the industry but commercial construction activity is flickering back into life
too. Overall this rebound in output, sentiment and orders is welcome but no-one
should take it as a definitive reversal in construction’s fortunes.

“With the Brexit clock now onto its final
countdown, there remains considerable scope for volatility in the months ahead
and the challenge for the industry now is to hold on to these impressive
gains.”